The Australian dollar experienced a volatile week in the previous week, but managed to close practically flat at the 0.74 handle.

The upcoming week can be volatile for the Aussie as well. On Monday, Chinese retail sales, industrial production and fixed assets investments numbers are due, which usually move commodities and the commodity currencies. Moreover, Chinese GDP for the second quarter will be released and should improve from 1.4% to 1.6% on the quarterly basis, but weaken somewhat year-on-year to 6.7%.

Later on Monday, US retail sales are seen slowing notably, which could be greenback negative and the AUDUSD pair might try to bounce from the current levels.

During the Asian session from Monday to Tuesday the RBA minutes will be released. At its latest meeting, the RBA sounded a bit dovish as it remains satisfied with the recent slump of the Australian dollar. Therefore, these minutes could cause some bearish momentum in the AUDUSD pair as well.

The US session will bring only industrial production and capacity utilization, which rarely cause any major movements on the markets. More importantly, the Fed’s chair Jerome Powell is due to testify on the Semiannual Monetary Policy Report before the Senate Banking Committee in Washington DC. His speech will be under close scrutiny and the US dollar will be sensitive to his remarks.

Mr. Powell will continue his testimony on Wednesday as well, but the on the second day the current Fed chair usually only repeats or conclude what was said on the first day.

On Thursday, Australian labor market data for June are due, with the employment change seen climbing marginally from 12,000 to 17,000. The unemployment rate is expected to stay unchanged at 5.4%.

No more major data will follow on Thursday or Friday and therefore sentiment could drive the AUDUSD pair further.

The pair is still hovering near 0.74, which are one year lows for the Aussie. The 0.74 – 0.73 zone is filled with many bids defending this level and bears will have a hard time breaking below.

On the upside, the resistance is around 0.7450 and afterward slightly below the 0.75 mark, where last week’s bounce stopped.

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I have been trading since 2011, with the most focus on the FX market. My preferred style is to hold open positions for a couple of days, thus something between a short-term and swing trader. I usually trade technical patterns and price action, however, I think fundamental analysis is also as important, therefore I am paying attention to the major macro news.

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